The report is quite a long read, but here’s the executive summary:
The UK is missing millions of unbuilt homes
Compared to the average European country, Britain today has a backlog of 4.3 million homes that are missing from the national housing market as they were never built. Addressing this backlog is the key to solving the housing crisis.
Solving a challenge of this scale – increasing the size of the UK’s housing stock by 15 per cent – requires policymakers and commentators to understand and resolve the root cause of such a large problem.
Britain’s housing supply issues began in 1947, not 1980 Britain’s housing supply issues began in 1947, not 1980.
The origins of the crisis lie in one of the two dramatic changes to housing policy in the United Kingdom that occurred just after the Second World War. One was that council housing became much more important, accounting for roughly half of all new homes built in the post-war period. The other was the introduction of a new discretionary planning system in England with the Town and Country Planning Act 1947, which continues to form the basis for planning across the UK in the present day.
These two changes are at the centre of political debate on the housing crisis today, with both put forward as competing explanations of Britain’s severe housing shortage. One explanation is focused on the introduction of Right to Buy and the subsequent decline of council housebuilding in the 1980s. The other explanation emphasises that England’s discretionary planning system reduces the supply of new homes through its case-by-case decision-making process for granting planning permission.
These two explanations both contain an element of truth, but they imply different priorities for policy – encouraging a return to extensive council housebuilding or reforming the planning system – to build the missing 4.3 million homes.
Using newly available data on housing that was collected after the Second World War by the United Nations, it is now possible to explore whether Britain’s housing supply issues began after 1980 with Right to Buy and a subsequent decline of council housebuilding, or whether it began shortly after the Town and Country Planning Act 1947 was introduced.
This report uses this new data and other sources to compare British housebuilding and outcomes to that in Ireland, France, Belgium, the Netherlands, (West) Germany, Austria, Switzerland, Denmark, Sweden, Norway, and Finland from 1955 to 2015. It finds that Britain’s housing shortage began at the beginning of the post-war period, not at its conclusion.
Specifically:
England and Wales saw housebuilding rates drop by a third after the introduction of the Town and Country Planning Act 1947, from 1.9 per cent growth per year between 1856 and 1939 to 1.2 per cent between 1947 and 2019. Private housebuilding fell by more than half over the same period.
Britain built far fewer homes than most other European countries from 1955-1979, even after adjusting for population growth, initial population, demolitions, and quality. This was because the UK had the lowest average private sector housebuilding rate of any similar European country in the post-war period. Other countries, such as Sweden and the Netherlands, show that Postwar Britain could have built both more council and private housing.
Britain’s social housebuilding rate fell from 1.1 per cent growth a year in 1968 to 0.6 per cent in 1979. The decline of council housebuilding did contribute to the decline of total housebuilding, but it began a decade before Right to Buy in 1980 and occurred alongside a simultaneous decline in private housebuilding in the 1970s.
In 1955, the UK had a ratio of dwellings per person that was 5.5 per cent above the European average, but by 1979 it was 1.8 per cent below it, and by 2015 it had fallen further to at least 7.8 per cent below the modern average. Although the UK began the post-war period with some of the best housing outcomes on the continent, since 1955 other European countries including Finland, Switzerland, and West Germany saw their housing outcomes overtake the UK as they built more.
The result of this underperformance is that England needs 442,000 new homes a year to close its housing backlog with the average European country over 25 years, or 654,000 to close it in ten years. England’s current housing target of 300,000 new homes a year will not clear the housing backlog for at least half a century. England’s recent housebuilding levels of 220,000 to 240,000 is the minimum at which housing outcomes remain stable compared to the average European country – any further decrease will see housing outcomes decline.
Planning reform is the key to ending the housing shortage
Solving a problem as big as the British housing crisis requires a big reform. Addressing the problems with the discretionary planning system, fundamentally untouched since 1947, is that big reform.
Specifically, this entails:
Replacing the discretionary planning system with a new rules-based, flexible zoning system. Increasing the certainty of the planning process and the supply of land for development is essential for any major increase in housebuilding, whether by the private or public sectors. The principle of shifting away from uncertain, case-by-case decision-making to a system where development is lawful so long as it follows the rules should guide all new planning reform proposals.
Increasing private sector housebuilding. More council and social housing can be a part of the solution, but given the scale of the backlog, significantly increasing the amount of private housebuilding will be crucial. No other European country has successfully maintained a high housebuilding rate either before or after the 1980s without more private housebuilding than we have today.
If we build all these houses in one city it would the second largest in the UK. It feels like housing is a huge issue that’s massively spoken about until election time. I haven’t heard any party accept Greens set out there plan for housing
Or, and I might sound crazy here, we don’t accommodate a new city’s worth of people every year that need housing?
Any answer to housing that does not involve building millions of new houses is no better than re-arranging the deckchairs on the Titanic
Any answer to our social problems that does not start out by tackling the horrific shortfall of one of the basic requirements of living in our climate is grossly missing the point. Our cost of living is driven by the ludicrous bidding war for housing which is driven by a crippling shortage of housing – without which you simply cannot survive.
We all know that the Town and Country Planning act failed in its core objective of removing the constant complaints and objections to developments. The dream was that well planned development would be supported. The reality is that the planning laws enable and empower the NIMBYs to an extent that has crippled the country.
I will vote for the party that has a credible approach to tackling this problem at real scale. Simply put this is the biggest social and economic problem we have.
We need a mass council house-building programme. It got us out of the post-war housing crisis and it’s the only thing that will get us out of this one.
Funnily enough ~4 million is the amount of council homes that were sold off throughout the 80s/90s, at a fraction of their cost, prior to exploding in value.
**edit**: to everyone replying regarding those houses still existing, no shit. But if they weren’t given away for pennies on the pound we’d have had a far different homebuilding outlook over the past 40+ years. They made a NIMBY generation who had a vastly reduced want for extra housing because they got theirs.
I’m getting tired of this headline. Maybe stop allowing so many people in the country? Maybe then we start hitting targets.
Nothing to do with almost a million people coming into the UK every year which also keeps wages low, but good news for the elites cheap labour. We had enough and moved to Asia, our rent here is only 120 pounds a month and there are too many apartments
Go on guys, kick out all the immigrants so you can realise it doesn’t actually solve anything. On the bright side, you won’t have anyone else to blame other than the people who are doing all they can to prevent new homes from being built.
I wonder why a densely populated country with low birth rates would possibly need to build 4m new homes, destroying country side and nature in the process… hmmmm
So, the way I see it, the way we are building at the moment is just ludicrous! We are forcing more and more housing into towns and villages that have completely unsuitable infrastructure. When we build, we need to do it properly. Build where people need it, build sustainable, appropriate, housing and build the supporting services with it.
My town has been building 1000 of houses over the past 10 years. But the adding all the extra populations with out adding new doctors and dentists mean there is a massive dentistry crisis. And not enough doctors or schools, Theres never anyy extra infa structure added for these extra people, except more Mcdonalds, and drive through Costas and other fast food places.
im all for building new housing, but with this housing give the people a chance at what other people take for granted.
Remove right to buy, give councils funding to make houses
My council allocated 1000 housing units on an old field behind my house – about 10 years ago. Some local residents formed an association to campaign against it, but the council went ahead and allocated the land anyway for housing.
10 years on, there still isnt any housing there, not because of objections but I think because there is just no manpower to build them.
14 comments
The report is quite a long read, but here’s the executive summary:
The UK is missing millions of unbuilt homes
Compared to the average European country, Britain today has a backlog of 4.3 million homes that are missing from the national housing market as they were never built. Addressing this backlog is the key to solving the housing crisis.
Solving a challenge of this scale – increasing the size of the UK’s housing stock by 15 per cent – requires policymakers and commentators to understand and resolve the root cause of such a large problem.
Britain’s housing supply issues began in 1947, not 1980 Britain’s housing supply issues began in 1947, not 1980.
The origins of the crisis lie in one of the two dramatic changes to housing policy in the United Kingdom that occurred just after the Second World War. One was that council housing became much more important, accounting for roughly half of all new homes built in the post-war period. The other was the introduction of a new discretionary planning system in England with the Town and Country Planning Act 1947, which continues to form the basis for planning across the UK in the present day.
These two changes are at the centre of political debate on the housing crisis today, with both put forward as competing explanations of Britain’s severe housing shortage. One explanation is focused on the introduction of Right to Buy and the subsequent decline of council housebuilding in the 1980s. The other explanation emphasises that England’s discretionary planning system reduces the supply of new homes through its case-by-case decision-making process for granting planning permission.
These two explanations both contain an element of truth, but they imply different priorities for policy – encouraging a return to extensive council housebuilding or reforming the planning system – to build the missing 4.3 million homes.
Using newly available data on housing that was collected after the Second World War by the United Nations, it is now possible to explore whether Britain’s housing supply issues began after 1980 with Right to Buy and a subsequent decline of council housebuilding, or whether it began shortly after the Town and Country Planning Act 1947 was introduced.
This report uses this new data and other sources to compare British housebuilding and outcomes to that in Ireland, France, Belgium, the Netherlands, (West) Germany, Austria, Switzerland, Denmark, Sweden, Norway, and Finland from 1955 to 2015. It finds that Britain’s housing shortage began at the beginning of the post-war period, not at its conclusion.
Specifically:
England and Wales saw housebuilding rates drop by a third after the introduction of the Town and Country Planning Act 1947, from 1.9 per cent growth per year between 1856 and 1939 to 1.2 per cent between 1947 and 2019. Private housebuilding fell by more than half over the same period.
Britain built far fewer homes than most other European countries from 1955-1979, even after adjusting for population growth, initial population, demolitions, and quality. This was because the UK had the lowest average private sector housebuilding rate of any similar European country in the post-war period. Other countries, such as Sweden and the Netherlands, show that Postwar Britain could have built both more council and private housing.
Britain’s social housebuilding rate fell from 1.1 per cent growth a year in 1968 to 0.6 per cent in 1979. The decline of council housebuilding did contribute to the decline of total housebuilding, but it began a decade before Right to Buy in 1980 and occurred alongside a simultaneous decline in private housebuilding in the 1970s.
In 1955, the UK had a ratio of dwellings per person that was 5.5 per cent above the European average, but by 1979 it was 1.8 per cent below it, and by 2015 it had fallen further to at least 7.8 per cent below the modern average. Although the UK began the post-war period with some of the best housing outcomes on the continent, since 1955 other European countries including Finland, Switzerland, and West Germany saw their housing outcomes overtake the UK as they built more.
The result of this underperformance is that England needs 442,000 new homes a year to close its housing backlog with the average European country over 25 years, or 654,000 to close it in ten years. England’s current housing target of 300,000 new homes a year will not clear the housing backlog for at least half a century. England’s recent housebuilding levels of 220,000 to 240,000 is the minimum at which housing outcomes remain stable compared to the average European country – any further decrease will see housing outcomes decline.
Planning reform is the key to ending the housing shortage
Solving a problem as big as the British housing crisis requires a big reform. Addressing the problems with the discretionary planning system, fundamentally untouched since 1947, is that big reform.
Specifically, this entails:
Replacing the discretionary planning system with a new rules-based, flexible zoning system. Increasing the certainty of the planning process and the supply of land for development is essential for any major increase in housebuilding, whether by the private or public sectors. The principle of shifting away from uncertain, case-by-case decision-making to a system where development is lawful so long as it follows the rules should guide all new planning reform proposals.
Increasing private sector housebuilding. More council and social housing can be a part of the solution, but given the scale of the backlog, significantly increasing the amount of private housebuilding will be crucial. No other European country has successfully maintained a high housebuilding rate either before or after the 1980s without more private housebuilding than we have today.
If we build all these houses in one city it would the second largest in the UK. It feels like housing is a huge issue that’s massively spoken about until election time. I haven’t heard any party accept Greens set out there plan for housing
Or, and I might sound crazy here, we don’t accommodate a new city’s worth of people every year that need housing?
Any answer to housing that does not involve building millions of new houses is no better than re-arranging the deckchairs on the Titanic
Any answer to our social problems that does not start out by tackling the horrific shortfall of one of the basic requirements of living in our climate is grossly missing the point. Our cost of living is driven by the ludicrous bidding war for housing which is driven by a crippling shortage of housing – without which you simply cannot survive.
We all know that the Town and Country Planning act failed in its core objective of removing the constant complaints and objections to developments. The dream was that well planned development would be supported. The reality is that the planning laws enable and empower the NIMBYs to an extent that has crippled the country.
I will vote for the party that has a credible approach to tackling this problem at real scale. Simply put this is the biggest social and economic problem we have.
We need a mass council house-building programme. It got us out of the post-war housing crisis and it’s the only thing that will get us out of this one.
Funnily enough ~4 million is the amount of council homes that were sold off throughout the 80s/90s, at a fraction of their cost, prior to exploding in value.
**edit**: to everyone replying regarding those houses still existing, no shit. But if they weren’t given away for pennies on the pound we’d have had a far different homebuilding outlook over the past 40+ years. They made a NIMBY generation who had a vastly reduced want for extra housing because they got theirs.
I’m getting tired of this headline. Maybe stop allowing so many people in the country? Maybe then we start hitting targets.
Nothing to do with almost a million people coming into the UK every year which also keeps wages low, but good news for the elites cheap labour. We had enough and moved to Asia, our rent here is only 120 pounds a month and there are too many apartments
Go on guys, kick out all the immigrants so you can realise it doesn’t actually solve anything. On the bright side, you won’t have anyone else to blame other than the people who are doing all they can to prevent new homes from being built.
I wonder why a densely populated country with low birth rates would possibly need to build 4m new homes, destroying country side and nature in the process… hmmmm
So, the way I see it, the way we are building at the moment is just ludicrous! We are forcing more and more housing into towns and villages that have completely unsuitable infrastructure. When we build, we need to do it properly. Build where people need it, build sustainable, appropriate, housing and build the supporting services with it.
My town has been building 1000 of houses over the past 10 years. But the adding all the extra populations with out adding new doctors and dentists mean there is a massive dentistry crisis. And not enough doctors or schools, Theres never anyy extra infa structure added for these extra people, except more Mcdonalds, and drive through Costas and other fast food places.
im all for building new housing, but with this housing give the people a chance at what other people take for granted.
Remove right to buy, give councils funding to make houses
My council allocated 1000 housing units on an old field behind my house – about 10 years ago. Some local residents formed an association to campaign against it, but the council went ahead and allocated the land anyway for housing.
10 years on, there still isnt any housing there, not because of objections but I think because there is just no manpower to build them.